SaaS Agreements Are NOT Good Communication Vehicles

Let met explain. Some SaaS companies add all kinds of things into their SaaS agreements, and when you are finished reading the agreement you understand everything possible about their offering. While this kind of makes sense at first blush, when you unpack this a little and deal with these types of agreements on a regular basis (which I do), you will soon see that this is not that efficient or effective.

The core problem here is that SaaS is not static and it morphs and changes more often than on-premise software. As many of you know most SaaS companies employ the Agile methodology or manifesto, which is all about rapid release cycles. This means that the customer has no choice but to accept the changes to the underlying software (in fact, this is one of the main benefits to SaaS). Q: So how should SaaS agreements accommodate this difference? A: Well often they don’t and that is the problem. So the trick is to find the right balance of what terms need and must be in the SaaS agreement, and what issues can be better addressed in an online FAQ or online policy.

There are core legal concepts that must be addressed in the agreement (limitations of liability, warranties, disclaimers, etc), but if you think about it there are other concepts that are more descriptive of how the thing works. These type of issues are great candidates for an FAQ. I even wrote a blog post about it.

Here are some example of what are better addressed outside the SaaS agreement.

How to setup an account or administer user accounts.

How to upload or export data or content to the SaaS service.

The details regarding support contacts, support process, severity level, etc.

Service Level Availability information.

I think the trick here is for the SaaS company to engage and collaborate with their SaaS attorney to figure out which issues are best addressed outside the agreement and which are better addressed within the agreement. So give it a try, and I think you will see great results!!